Correlation Between Citigroup and Nanjing Canatal

Can any of the company-specific risk be diversified away by investing in both Citigroup and Nanjing Canatal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citigroup and Nanjing Canatal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Nanjing Canatal Data, you can compare the effects of market volatilities on Citigroup and Nanjing Canatal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citigroup with a short position of Nanjing Canatal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nanjing Canatal.

Diversification Opportunities for Citigroup and Nanjing Canatal

0.56

Correlation Coefficient

Citigroup  Nanjing Canatal

Very weak diversification

The 3 months correlation between Citigroup and Nanjing is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nanjing Canatal Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Canatal Data and Citigroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citigroup are associated (or correlated) with Nanjing Canatal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Canatal Data has no effect on the direction of Citigroup i.e., Citigroup and Nanjing Canatal go up and down completely randomly.

Pair Corralation between Citigroup and Nanjing Canatal

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.5 times more return on investment than Nanjing Canatal. However, Citigroup is 2.01 times less risky than Nanjing Canatal. It trades about 0.14 of its potential returns per unit of risk. Nanjing Canatal Data is currently generating about 0.05 per unit of risk. If you would invest  6,356  in Citigroup on October 9, 2024 and sell it today you would earn a total of  1,012  from holding Citigroup or generate 15.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Citigroup  vs.  Nanjing Canatal Data

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nanjing Canatal Data

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nanjing Canatal Data are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nanjing Canatal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Nanjing Canatal

The main advantage of trading using opposite Citigroup and Nanjing Canatal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nanjing Canatal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nanjing Canatal will offset losses from the drop in Nanjing Canatal's long position.

The idea behind Citigroup and Nanjing Canatal Data pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.